Archives 2020

SEATTLE, July 15, 2020 /PRNewswire/ — (NASDAQ: RDFN) — Home sales surpassed pre-pandemic levels for the first time the week ending July 5, up 2% on a seasonally adjusted basis compared to January and February levels, according to a new report from Redfin (www.redfin.com), the technology-powered real estate brokerage.  

The housing market continued its recovery in the week ending July 5despite the rise in COVID-19 cases. Demand is being propelled primarily by record low mortgage rates; the average 30-year fixed rate was down to 3.03% for the week ending July 9. 

“The industry is responding to an avalanche of applications for refinances and purchases,” said Rob Foos, a mortgage advisor with Redfin Mortgage in Boston. “A combination of rock-bottom rates plus pent-up purchase demand has resulted in the highest levels of purchase applications in about a decade.”

Several leading indicators suggest that home sales will continue to increase in the coming weeks; pending sales grew 10% from pre-pandemic levels on a seasonally adjusted basis and the Redfin home-buying demand index has hovered around 20% above the pre-pandemic levels for seven straight weeks. Mortgage purchase applications were also about 15% above pre-pandemic levels. 

Potential sellers worry about finding their next home

New listings were at their pre-pandemic levels for three straight weeks, up 1% on average on a seasonally adjusted basis. But there aren’t enough new listings to satisfy the strong homebuying demand. As a result, the total number of homes for sale was down 29% from a year ago. Redfin agents report that sellers are now rarely citing coronavirus concerns as a reason not to list, but more often cite the lack of homes for sale itself as the thing that’s holding them back. 

“Some of my clients are considering selling, but it’s a matter of finding a home they can buy,” said Redfin agent Thomas Wiederstein in Phoenix. “Even if they do find a home that checks all the boxes, many move-up buyers can’t buy a new home before they sell their current one. With bidding wars so common, it’s very hard to get an offer accepted that’s contingent on the sale of the buyer’s current home.”

Lack of homes for sale fuels competition

Buyers face competition more often than not, as more than half of Redfin offers faced a bidding war in June for the second month in a row, and homes are going off-market quickly. The share of listings that went off market within two weeks stood at 45% this week, up from 35% a year ago. Shoshana Godwin, a Redfin agent in Seattle, is seeing a return to bidding wars and buyers waiving contingencies to make their offers more attractive. 

“We’re back to buyers waiving their rights to cancel the contract if something pops up during the inspection or they can’t get their loan approved. Buyers used to try to inspect the home before writing an offer, but now sellers are providing an inspection report upfront. That brings in even more bidders because they don’t need to spend $500 on an inspection just to make an offer,” Godwin said.

Redfin San Francisco agent Chad Eng describes a housing market that feels “chaotic” in the absence of pre-pandemic norms.

“Due to COVID-19, agents are scheduling back-to-back 15-minute in-person home tours instead of holding traditional open houses. If you miss your appointment, you’re out of luck. Sellers often set a deadline for buyers to submit offers so they can review all of their options at once, but now that there’s so much uncertainty, sellers who receive one strong offer are less willing to wait around to see what else trickles in. I’ve seen multiple sellers accept an offer before the deadline, meaning buyers who wait miss out on their shot at buying the home.”

With competition come rising home prices. The average sale price for the week ending July 5 was $310,000, up 7% from a year ago. Asking prices for newly listed homes continue to accelerate as well, rising 16% over the same week last year to $324,900. 

To view the full report, including charts, outlook and methodology, please visit: https://www.redfin.com/blog/home-sales-above-pre-coronavirus-levels/

IRVINE, Calif., July 10, 2020 /PRNewswire/ — ATTOM Data Solutions, curator of the nation’s premier property database and first property data provider of Data-as-a-Service (DaaS), today released its second-quarter 2020 Special Report spotlighting county-level housing markets around the United Statesthat are more or less vulnerable to the impact of the Coronavirus pandemic. The report shows that areas most at risk in the second quarter sat on the East Coast and in northern Illinois – with clusters in the New York City, Chicago, Baltimore and Washington, D.C., areas – while the West had the fewest.

The report reveals that a stretch of states running from Connecticutthrough Florida, plus Illinois, had 43 of the 50 counties most vulnerable to the economic impact of the pandemic. They included 11 suburban counties around New York City, seven in the Chicago, IL area, five around Washington, D.C. and four around Baltimore, MD. The only four western counties were in California, with none in other West Coast or southwestern states.

The East Coast pattern continued a trend identified in the first-quarter 2020 report, with variations from state to state. The previous report found that New Jersey and Florida had 24 of the top 50 most at-risk counties, Maryland had two, Illinois five and California only one.

Markets are considered more or less at risk based on the percentage of homes currently facing possible foreclosure, the portion of homes with mortgage balances that exceed the estimated property value, and the percentage of local wages required to pay for major home ownership expenses.

The conclusions are drawn from an analysis of the most recent home affordability, home equity and foreclosure reports prepared by ATTOM. Rankings are based on a combination of those three categories in 406 counties around the United States with sufficient data to analyze. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the three ranks. See below for the full methodology.

The findings surface amid signs that home-price growth stalled across significant parts of the country in May 2020, with more expensive areas of the West among those getting hit hardest.

“Home-sales data from around the country is starting to show that eight years of price gains may be coming to an end amid the economic damage flowing from the virus pandemic. It’s still too early to make any definitive calls, but the latest numbers show storm clouds gathering over the market,” said Todd Teta, chief product officer with ATTOM Data Solutions. “With this second special report on the potential impact of the pandemic, we see pockets around the country that appear more or less poised to withstand downward pressure on prices and other market conditions. Over the next few months, enough data should come in to tell us how things will most likely pan out.”

Most vulnerable counties clustered around New York City, Chicago, Baltimore and Washington, D.C.
A majority of the 50 U.S. counties most at-risk in the second quarter of 2020 from housing-market troubles connected to the pandemic (from among the 406 counties included in the report) were in the metropolitan statistical areas around New York, NY, Chicago, IL, Baltimore, MD, and Washington, D.C.

They included 11 in the New York City suburbs: Bergen, Essex, Hunterdon, Middlesex, Sussex and Union counties in New Jersey, plus Nassau, Orange, Rockland, Suffolk and Westchester counties in New York. Another seven – Cook, De Kalb, Du Page, Kendall, Lake, McHenry and Will counties – were in and around Chicago. 

Five counties in and around the Washington, D.C. metro ranked in the top 50 most at-risk, including Charles, Prince George’s and Frederick in Maryland, and Spotsylvania and Stafford in Virginia. Four were in the northeastern part of Maryland: Baltimore, Carroll, Cecil and Harfordcounties. 

Among others in the top 50 were five of Connecticut’s eight counties, including Litchfield, Middlesex, New Haven, Tolland and Windham counties. 

The only western counties among the top 50 most at risk from problems connected to the Coronavirus outbreak were Humboldt County, CA, in the Eureka metropolitan statistical area, Madera County, CA (outside Merced), Riverside County, CA (outside Los Angeles) and Shasta County (Redding), CA.

Higher levels of unaffordable housing, underwater mortgages and foreclosure activity found in most-at-risk counties

Major home ownership costs (mortgage, property taxes and insurance) consumed more than 30 percent of average local wages in 43 of the 50 counties most vulnerable to market problems connected to the virus pandemic in the second quarter of 2020. They included Westchester County, NY (outside New York City) (77.1 percent of average local wage required for major ownership costs), Rockland County, NY (outside New York City) (71.1 percent of wages); Nassau County, NY (outside New York City) (63.4 percent); Riverside, CA (outside Los Angeles) (62.5 percent) and Bergen County, NJ (outside New York City) (58.5 percent).

In 36 of the 50 most at risk counties, at least 15 percent of mortgages were underwater in the first quarter of 2020 (with owners owing more than their properties are worth). Those with the highest underwater rates within those top 50 counties included Sussex County, NJ (outside New York City) (39.2 percent); Monroe County, PA (outside Wilkes-Barre) (36.3 percent); Cumberland County (Vineland), NJ (35.7 percent); Livingston County, LA (outside Baton Rouge) (34.3 percent) and Saint Clair County, IL (outside St. Louis, MO) (34.2 percent). 

More than one in 750 residential properties faced a foreclosure action in the first quarter of 2020 in 47 of the 50 most at-risk counties. Those with the highest rates included Cumberland County (Vineland), NJ (one in every 180 properties facing possible foreclosure); Sussex County, NJ (outside New York City) (one in every 210); Camden County, NJ (outside Philadelphia, PA) (one in every 231); Atlantic County (Atlantic City), NJ (one in every 293) and Will County, IL (outside Chicago) (one in every 294).

Counties least at-risk concentrated in Colorado, Oregon, Texas and Wisconsin

Twenty-six of the 50 least-vulnerable counties from among the 406 included in the report in the second quarter of 2020 were in Colorado, Oregon, Texas and Wisconsin. The largest included Harris County (Houston), TX; Dallas, Tarrant and Collin counties, all in the Dallas-Fort Worth metro area, and Travis County (Austin), TX.

Lower levels of unaffordable housing, underwater mortgages and foreclosure activity found in less-vulnerable counties

Major home ownership costs (mortgage, property taxes and insurance) consumed less than 30 percent of average local wages in 19 of the 50 counties least at-risk from market problems connected to the virus pandemic in the second quarter of 2020. They included Winnebago County(Oshkosh), WI (18.6 percent of average local wage required for major ownership costs), Benton County (Rogers), AR (21.1 percent of wages); Racine County, WI (outside Milwaukee) (21.4 percent); Sheboygan County, WI (21.6 percent), and Monroe County, MI (outside Detroit) (22.7 percent).

Less than 15 percent of mortgages were underwater in the first quarter of 2020 in all but one of the 50 least at-risk counties. Those with the lowest underwater rates included San Mateo County, CA (outside San Francisco) (2 percent); Chittenden County (Burlington), VT (3.6 percent); King County(Seattle), WA (4.5 percent); Dallas County, TX (4.7 percent) and Washington County, OR (outside Portland) (4.9 percent). 

Less than one in 750 residential properties faced a foreclosure action in the first quarter of 2020 in all 50 of the least at-risk counties. Those with the lowest foreclosure rates included San Mateo County, CA (outside San Francisco) (one in 12,566 properties facing possible foreclosure); Washington County, WI (outside Milwaukee) (one in 6,259); Chittenden County (Burlington), VT (one in 5,755); Eau Claire County, WI (one in 5,471) and Yolo County (Sacramento), CA (one in 4,306).

https://www.prnewswire.com/news-releases/east-coast-and-illinois-have-highest-concentratons-of-housing-markets-vulnerable-to-coronavirus-impact-301091317.html

It means that potential buyers should be prepared to strike quickly, and sellers who have been on the fence through the onset of the coronavirus pandemic might now want to list.

Though many sellers have taken a wait-and-see approach through the pandemic, homes that have made it onto the market have been snatched up relatively quickly by eager buyers. In mid-June, the typical home sold in the U.S. had an offer accepted 22 days after it was listed for sale. That’s as fast as homes have sold since early June 2018, when they typically sold in 21 days. Even at the slowest point of the spring – in late May – that number only climbed to 31 days, just six days slower than late May last year.

The same limited-inventory dynamic – with sellers pulling back from the market more than buyers – has kept home prices relatively steady during the pandemic, though signs point to a modest decline in the coming months.

More homes are coming onto the market – new listings are up 14% month over month – showing sellers appear to be gaining confidence in that buyer demand. Many who listed their homes during the past few weeks were rewarded with a quick sale. Inventory remains incredibly tight and sales are happening quickly, so buyers should be prepared to move fast when they find a home they’re interested in.

“Buyers shopping today might expect to be welcomed by desperate sellers, but they’ll instead discover houses selling like hotcakes in the speediest market in recent memory,” said Zillow economist Jeff Tucker. “The market did slow down in April, but anyone shopping this summer needs to be prepared to keep up with the lightning-quick pace of sales today. The question is whether the tempo will slow after buyers finish playing catch-up from planned spring moves, or if this fast-paced market will stay hot thanks to continued low interest rates and buyers scrambling over record-low summer inventory.”

In 29 of the 35 largest U.S. metros, homes are typically seeing offers accepted faster than a year ago. Homes are selling the fastest – in only five days – in Columbus. Cincinnati (six days), Kansas City (six days), Seattle (seven days) and Indianapolis (seven days) are just behind. Pittsburgh has seen the most dramatic acceleration of late, with sellers typically accepting an offer 17 days sooner than at this time last year and 40 days sooner than a month ago.

The slowest market by some margin is New York, where homes are typically spending 70 days on the market before an offer is accepted, more than three weeks longer than at this time last year. Miami (55 days) and Atlanta (38 days) are the next slowest.

New York and Miami have typically been among the slowest-moving for-sale markets, so the recent slowdown may not be fully attributable to the pandemic. Still, the year-over-year slowdown of 23 days in New York is the biggest in the country, and the six-day slowdown in Miami is the third-biggest behind New York and Atlanta.

Zillow says homes are selling at their fastest pace for 2 years

The 1031 exchange sector is recovering from COVID-19 as small investors seek to grow their portfolios via the tax tool, experts say. In June, IPX 1031, a platform that facilitates 1031 deals, saw an 18 percent decline in number of orders from last June, when orders had hit a recent record high, said, executive vice president and western regional manager Jennifer Keen.

Orders rose 30 percent year over year in January but plunged 30 percent in April and 50 percent in May, she said on a Marcus & Millichap webinar called Maximizing 1031 Exchanges. “2019 was an incredible year for IPX,” she said. “That gives me a lot of confidence — that we’re only down 18 percent.”

1031 exchange investors are motivated by a rare window of opportunity to make high returns, said Marcus & Millichap senior vice president and research services national director John Chang. That window exists because the cost of capital has decreased while capitalization rates have remained stable. “The 10-year Treasury has fallen significantly. It’s around 70 basis points right now, which is the lowest we’ve seen ever. Interest rates are dramatically lower than in the past, and that signals that the yield premium on the asset versus the cost of capital has opened back up and created another investment window.”

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Many small investors are trading multifamily properties for triple-net-lease retail properties, said Marcus & Millichap senior vice president and retail division national director Scott Holmes. “When people go into net lease investments through a 1031 exchange, 47 percent of the time, they’re coming out of apartments; 12 percent are coming out of multitenant retail.”

The federal government also is offering the 1031 exchange sector relief by extending certain deadlines that govern when a property has to trade in order to qualify for the tax deferral. The deadline was pushed from April 1 to July 15 and could push further, Keen said. “During this pandemic, many times you couldn’t see a property and lending became a challenge, and that slowed things down. We’re still not quite up to speed.”

https://www.icsc.com/news-and-views/icsc-exchange/investors-have-a-rare-window-to-make-high-returns-on-1031-exchanges-experts

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. You can look forward to a Weekly Housing Trends View near the end of each week along with weekly coverage from our Housing Market Recovery Index and a weekly video update from our economists. Here’s what the housing market looked like last week.

Weekly Housing Trends Key Findings

• National Recovery Index: The realtor.com Housing Market Recovery Index reached 92.0 nationwide this week, the highest index value since the middle of March when COVID-19 disruptions began. This week’s jump also represents the largest weekly increase in four weeks, taking the index just 8.0 points below the pre-COVID baseline.
• Local Recovery: An additional two markets have crossed the recovery benchmark this week, taking the total number of markets above the January baseline to 10, the highest since the COVID onset. The overall recovery index is showing greatest recovery in Seattle, Denver, Boston, Jacksonville, and Philadelphia, Regionally, the West (99.6) continues to lead the recovery with the overall index now virtually at the January benchmark. The South (93.9), which led the early recovery, is beginning to lag relative to other regions as we head into the summer, with both the Northeast and Midwest (94.5 and 93.6) catching up.
• New listings are down 19 percent. Buyer interest in the housing market has more than fully recovered whether we’re using online traffic or purchase mortgage applications as a gauge. In comparison to buyers, the pace of sellers coming back to the market is lagging which is helping market balance measures such as price and time on market move in a seller-friendly direction. New listings are a crucial pre-cursor to home sales, particularly in an inventory-light market. 
• Median listing prices are now growing at 5.6 percent over last year, more than a percentage point above pre-COVID pace.
• Time on market is now just 13 days slower than last year. While it takes longer to find a buyer and complete a sale compared to this time last year, the gap is shrinking as buyers return and have to move faster to compete for a limited number of homes for sale.
• Total inventory was down 29 percent. The number of homes for sale continues to shrink at a bigger pace relative to last year because buyers outnumber sellers in this unusual summer season.    

Data Summary

	Week ending June 20	Week ending June 13	Week ending June 6	First Two Weeks March
Total Listings	-29% YOY	-27% YOY	-25% YOY	-16% YOY
Time on Market	13 days slower YOY	16 days slower YOY	16 days slower YOY	-4 days faster YOY
Median Listing Prices	+5.6% YOY	+4.6% YOY	+4.3% YOY	+4.5% YOY
New Listings	-19% YOY	-20% YOY	-21% YOY	+5% YOY

Weekly Housing Trends View — Data Week June 20, 2020

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. You can look forward to a Weekly Housing Trends View near the end of each week along with weekly coverage from our Housing Market Recovery Index and a weekly video update from our economists. Here’s what the housing market looked like last week.

Weekly Housing Trends Key Findings

• Median listing prices are now growing at 4.6 percent over last year, just above the pace seen pre-COVID.
• New listings are still down 20 percent. More sellers are returning to the market compared to the early COVID period, but fewer than a week ago, and the number of new listings remains below last year levels. New listings typically peak over the next month (mid-June to mid-July). Given the importance of new home listings to sales, to see home sales bounce back, we’ll need to see a later seasonal peak this year.
• Time on market remained 16 days slower than last year as it takes longer to find a buyer and complete a sale in the current markets. Time on market could speed up if buyers continue to outnumber sellers.
• Total inventory was down 27 percent. Signs are pointing to rising home buyer interest, and steeper declines in inventory are on the horizon unless more sellers list homes for sale. 

Data Summary

	Week ending June 13	Week ending June 6	Week ending May 30	First Two Weeks March
Total Listings	-27% YOY	-25% YOY	-23% YOY	-16% YOY
Time on Market	16 days slower YOY	16 days slower YOY	17 days slower YOY	-4 days faster YOY
Median Listing Prices	+4.6% YOY	+4.3% YOY	+3.1% YOY	+4.5% YOY
New Listings	-20% YOY	-21% YOY	-23% YOY

Weekly Housing Trends View — Data Week June 13, 2020

Mortgage rates have fallen to a new all-time low for the fourth time this year. But there’s significant upside risk to the low rate environment, and Americans may not want to wait too much longer before locking rates in.

The 30-year fixed-rate mortgage averaged 3.13% for the week ending June 18, down eight basis points from a week earlier, Freddie Mac FMCC, -0.60%reported Thursday. The previous record low was 3.15% back at the end of May. A year ago, the 30-year home loan averaged 3.84%.

The 15-year fixed-rate mortgage dropped four basis points to an average rate of 2.58%. The 5-year Treasury-indexed hybrid adjustable-rate mortgage dipped one basis point to 3.09%.

Mortgage rates have hit another record low due to declining inflationary pressures, putting many home buyers in the buying mood,” Freddie Mac’s chief economist Sam Khater said in the report.

The interest rates on home loans roughly track the direction of long-term bond yields, including the 10-year Treasury note. The 10-year Treasury yield TMUBMUSD10Y, 0.699% has seesawed over the past week in response to weakness in the stock market driven by concerns about the rise in coronavirus infections across many parts of the country.

Upticks in coronavirus cases across the country left market participants skeptical of the economic recovery’s sustainability,” said Matthew Speakman, an economist with Zillow ZG, +1.09% . “This sparked a sell-off in stocks and a flight to the safe haven of bonds — something that normally pushes mortgage rates lower.”

‘Rates could just as easily begin to trend upward again, particularly if key economic data or measures to contain or treat the virus show meaningful improvements.— Matthew Speakman, an economist with Zillow

But now the mortgage market is at a turning point, Speakman said. And it all depends on what happens with the spread of COVID-19 from here on out.

“More bad news regarding the uptick in coronavirus cases would likely send rates back downward, possibly to new lows,” Speakman said. “However, rates could just as easily begin to trend upward again, particularly if key economic data or measures to contain or treat the virus show meaningful improvements.”

Rates going up could spell trouble for the broader housing market. Eager to lock in the cheap financing, buyers have flocked to apply for home loans to purchase property. There’s evidence that the low rates, coupled with pent-up demand caused by the coronavirus stay-at-home orders, is  driving a significant recoveryacross the housing market.

An increase in rates would hamper the housing market’s ability to rebound. But it’s not the only headwind the market is facing. “It would be difficult to sustain the momentum in demand as unsold inventory was at near record lows coming into the pandemic and it has only dropped since then,” Khater said.

In other words, with very few homes for sale, there’s a rather low ceiling on how high sales activity can go for the foreseeable future.

https://www.marketwatch.com/story/mortgage-rates-drop-to-another-record-low-but-heres-why-americans-should-think-twice-about-waiting-to-lock-them-in-2020-06-18?siteid=yhoof2&yptr=yahoo

House hunters rushing to lock in record low mortgage rates likely have a bit more time to shop thanks to a pair of announcements from the Federal Reserve this week.

On Wednesday, the Fed’s policy makers said they would maintain the near zero interest rates instituted earlier this year, indicating they expect to keep rates at basement levels through 2022. In its statement, the Fed also said that it would continue aggressively buying government and mortgage-backed bonds at a steady rate to keep markets functioning.

The measures are the most extreme since the 2008 financial crisis and were first announced in mid-March, as steps to limit the spread of the coronavirus wreaked havoc on U.S. businesses and kept house hunters on the sidelines. By reiterating its commitment to these tools, the Fed is indicating that the economy may take longer to recover than hoped, but is also showing that it will take extraordinary measures to help consumers.

“It’s bittersweet,” says Ralph McLaughlin, chief economist at home investment startup Haus. “It means there is concern about the U.S. economy’s ability to take off.”

That was certainly the message the stock market took. The Dow plunged more than 1,800 points on Thursday as investors reacted to the Fed’s decision and a spurt of new COVID cases around the country.

What the Fed’s move means for mortgage rates

Low rates from the Fed do mean some good news for homeowners: Mortgage rates are likely to remain near record lows for an extended period. (For the week ending June 11, the average interest rate for a 30-year fixed-rate mortgage was 3.21% with 0.9 discount points paid.)

“The risk of rates trending higher, which is something we were facing no more than a week ago, has almost disappeared,” said Zillow Economist Matthew Speakman.

The expansion of the bond buying program, known as “quantitative easing,” also means that people who want to take out a new mortgage or refinance an existing one should be able to, since mortgage lenders will have an easier time selling on mortgages.

“The Fed’s statement essentially stated they are not going to rock the boat,” wrote Sam Khater, chief economist at mortgage giant Freddie Mac. “The Fed’s stance is positive news for the housing market and allows mortgage rates to drift lower since they have room to decline given mortgage spreads.”

What Khater means by “spread,” is the gap between the 10-year Treasury yield and 30-year mortgage rates. Mortgage rates are not directly tied to the federal funds rate, the short term rate the Fed controls. Instead mortgages tend to move in step with the 10-year Treasury note, which responds quickly to Fed statements, since most homeowners typically move or refinance within a decade.

That said, some economists do not expect mortgage rates to sink much lower than they are right now since most mortgage lenders are already operating at capacity. Others warn the record low rates are not available to everyone.

“The rates that we are talking about are the average rates. They apply to your most vanilla loans,” says Speakman. Think 30-year loans for people with excellent credit and who can make a 20% downpayment. “For others, it is still really challenging to get that credit.” 

https://money.com/fed-move-mortgage-rates/

Our research team releases regular monthly housing trends reports. These reports break down inventory metrics like the number of active listings and the pace of the market. In light of the developing COVID-19 situation affecting the industry, we want to give readers more timely weekly updates. You can look forward to a Weekly Housing Trends View near the end of each week. Here’s what the housing market looked like last week.

Weekly Housing Trends Key Findings

• Total inventory was down 23%. Signs are pointing to rising home buyer interest, and steeper declines in inventory are on the horizon unless more sellers list homes for sale.  
• Time on market was 17 days slower than last year as it takes longer to find a buyer and complete a sale in the current markets.
• New listings down 23%. With fewer sellers returning to the market compared to a week ago, the yearly declines in new listings remain roughly steady, suggesting that while the general trend is toward improvement, it’s a bumpy road and seller confidence is not quite back to normal yet.  
• Median listing prices have maintained momentum and growth is now closer to pre-COVID levels.

Data Summary

	Week ending May 30	Week ending May 23	Week ending May 16	First Two Weeks March
Total Listings	-23% YOY	-22% YOY	-20% YOY	-16% YOY
Time on Market	17 days slower YOY	16 days slower YOY	15 days slower YOY	4 days faster YOY
Median Listing Prices	3.1% YOY	3.1% YOY	1.5% YOY	+4% YOY
New Listings	-23% YOY	-20% YOY	-28% YOY	+5% YOY

Weekly Housing Trends View

New listings: On the slow path to recovery. Nationwide the size of declines held mostly steady this week, dropping 23 percent over last year, a slight increase over last week but still an improvement over the 30 percent declines in the first half of May. 

More properties will have to enter the market in June to bring the number of options for buyers back to normal levels for this time of the year, nationwide and in all large markets. 
In the first two weeks in March (our pre-COVID-19 base), new listings were increasing 5 percent year-over-year on average. In the most recent three weeks ending May 16, May 23, and May 30 the volume of newly listed properties decreased by 28 percent, 20 percent, and 23 percent year-over-year, respectively. The continued declines in newly listed properties mean we’ve yet to see the full wave of spring sellers return to the market. However, recovery could be on the horizon as three quarters (36 of 99) of large metros continue to see smaller declines this week, including New York and Chicago.

Asking prices: Price gains keep momentum as the mix of homes for-sale continues to revert back toward pricier properties.

In the first two weeks of March (our pre-COVID-19 base), median listing prices were increasing 4.4 percent year-over-year on average. In the most recent three weeks ending May 16, May 23, and May 30, the median U.S. listing price posted an increase of 1.5, 3.1 and 3.1 percent year-over-year, respectively. While current price gains remain below pre COVID-19 levels, we expect them to continue accelerating in the weeks to come as more sellers regain confidence and inventory remains limited relative to buyer interest. Locally, 81 of the largest 100 metros saw asking prices increase over last year.

Total Active Listings: Sellers have yet to come back in full force, limiting the availability of homes for sale. Total active listings are declining from a year ago at a faster rate than observed in previous weeks, and this trend could worsen as buyers regain confidence and come back to the market before sellers.

Weekly data show total active listings declined 23 percent compared to a year ago as the lack of sellers is currently outweighing the extra time homes spend on the market. Signs, such as more purchase mortgage applications than last week and a year ago, are pointing to rising home buyer interest, and steeper declines in inventory are on the horizon unless more sellers list homes for sale to meet rising demand. 

Time on market: While new listings and asking prices are gaining momentum, homes are still sitting over two weeks longer on the market than this time last year. It could take a few more weeks for time on market to reach pre-COVID levels as buyers come back to the market and the pace of sales resumes.
In the first two weeks in March (our pre-COVID-19 base), days on market were 4 days faster than last year on average. The trend in time on market began to slow in mid-March, but the indicator didn’t register an increase until April. Data for the week ending May 30 showed that time on market was 17 days or 30 percent greater than last year, the biggest increase in time on market since 2013. With fewer fresh new properties and buyers taking their time in this strange new world of home searching, sellers should be prepared to wait longer to find a buyer and longer for the transaction to close as well. It’s visible in local data as well as the national figures, with 85 of the largest 100 metros showing similar double-digit percent increases in time on market from one year ago. However, more markets continue to see smaller single-digit increases and could see time on market drop in June, including Dallas, San Francisco and Nashville.

Weekly Housing Trends View — Data Week May 30, 2020

Mortgage rates have remained below 3.3% for four straight weeks

Mortgage rates fell to near-record lows — and there’s reason to think they will drop even lower in the future.

The 30-year fixed-rate mortgage averaged 3.24% for the week ending May 21, down four basis points from a week ago, Freddie Mac FMCC, -4.07% reported Thursday. That was just above the record low set earlier in May of 3.23%.

For the 15-year fixed-rate mortgage, the average rate dropped two basis points to 2.7%. Meanwhile, 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.17%, down one basis point from last week.

This week’s decline in rates was prompted by comments from the Federal Reserve. “Mortgage rates slid today after a sobering assessment from the Federal Reserve of the tough economic road ahead,” said George Ratiu, senior economist at Realtor.com. The central bank downgraded its economic forecast ahead of its meeting last month, according to notes released Wednesday.

The Federal Reserve indicated that they would keep interest rates low for an extended period of time to help the economy bounce back from the coronavirus pandemic. But Fed officials have warned that the central bank’s effectiveness in addressing the economic impact of the outbreak could be limited if the U.S. doesn’t resolve public health issues.

“Even as the stock market has improved in recent weeks — normally prompting an upward move in mortgage rates — the still-uncertain outlook for the economy and seemingly low risk of inflation has kept bond yields in check,” said Zillow ZG, +4.77% economist Matthew Speakman.

Historically, mortgage rates have roughly followed the direction of long-term bond yields, including the yield on the 10-year Treasury note TMUBMUSD10Y, 0.660%. That relationship has diverged somewhat throughout the coronavirus crisis. 

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While bond yields and mortgage rates have both fallen throughout the outbreak, mortgage rates have not decreased as much as bond yields would suggest. That’s in large part due to friction in the mortgage industry caused by the massive wave of forbearance requests that servicers have received.

With millions of Americans skipping their monthly mortgage payments, firms have had to tighten their lending activity to cope, rather than drop rates.

However, the spread between bond yields and mortgage rates means that the mortgage industry has some wiggle room to bring rates down even further, Sam Khater, chief economist at Freddie Mac, said in his company’s weekly report.

Meanwhile, the quotes that borrowers actually see will likely continue to depend on their creditworthiness so long as the U.S. economy remains on shaky ground, experts said.

“Borrowers with great credit who are seeking a straightforward loan are being quoted at significantly lower rates than less creditworthy borrowers, resulting in a range of rates that tells a broader story than just the average,” Speakman said.

https://www.marketwatch.com/story/mortgage-rates-fall-to-near-historic-low-on-concerns-about-coronavirus-pandemic-2020-05-21?siteid=yhoof2&yptr=yahoo